Affordable Internet carrot, legislation review in federal budget

OTTAWA — With a focus on the digital economy, the federal government will start looking beyond geography to bridge the digital divide in Canada, adding new funding to encourage Internet Service Providers (ISPs) to offer affordable Internet packages, to improve digital literacy, and by announcing its intention to modernize the Telecom and Broadcasting Acts in Budget 2017. “Access to the Internet opens up a world of opportunities — from social connections with friends and family to new ways to learn and work. Most Canadians are already online, but many low-income families face financial barriers to access, such as the cost of purchasing a computer and the high cost of an Internet connection at home,” budget documents said. Dubbed the Affordable Access program, the new $13.2-million investment will be spread over five years, beginning in fiscal year 2017-18, to “help service providers offer low-cost home Internet packages to interested low-income families.” That money won’t be given to ISPs, but will be for a government-created income validation tool companies can use to determine someone’s eligibility for their program, according to the government, adding that it’s up to the individual companies to set their own parameters for who qualifies as low-income. Rogers Communications Inc., Telus Corp. and an Ottawa non-profit ISP all offer $10 and $25 monthly Internet packages for low-income families, with eligibility tied to subsidized housing. The funding will also go towards reaching a target of 50,000 computers “refurbished through the existing Computers for Success Canada program” to be distributed to families alongside the low-cost packages. Affordable access to the Internet ties into the government’s gender-based analysis — a practice that identifies the ways public policy affects men and women differently — of this year’s budget. Budget documents noted that alongside “several cross-cutting barriers” limiting Internet adoption such as lower education and income levels and advanced age, there are also “associated gender imbalances as well, since women are disproportionately represented among low-income families and among seniors, for example, women are less intensive users of the Internet compared to men.” “Budget 2017 includes several measures to help promote the participation of diverse groups of women and men in and the digital economy — an important part of the Government’s overall economic growth strategy,” the budget said. While last year’s budget included the $500-million, five-year rural broadband program, Connect to Innovate, the 2017 announcements are on a much-smaller, and more personal, scale. “To make sure that all Canadians can be full participants in the digital economy and experience its benefits first-hand, the Government is investing in programs to better help underserved Canadians,” budget documents said. The budget highlighted the Economist Intelligence Unit’s report from earlier this month on Internet inclusivity, which ranked Canada eighth overall but first for Internet affordability. “An area where Canada can improve, however, is by addressing digital divides that result in some Canadians being underserved by the digital economy,” the budget book said. A new $29.5 million over five years is proposed for a Digital Literacy Exchange program, to support non-profit organizations in implementing “initiatives that teach basic digital skills, including how to use the Internet safely and effectively” out of venues such as public libraries and seniors’ homes. Another $50 million over two years is set aside to support programs that teach kids coding and other digital skills, while a five-year, $22.3-million commitment is aimed at developing assistive technology to help people with disabilities through devices such as screen readers, alternative keyboards and braille displays. A further $5 million over five years will be made available to Statistics Canada and the private sector to conduct “surveys on the impact of digital technology in Canada.” Geographically-targeted aid isn’t ruled out in the budget, however, with broadband connectivity included as a potential use for the 11-year, $2-billion infrastructure investment in northern and rural communities. Urban communities could also take advantage of the 11-year, $300-million pot for Infrastructure Canada’s new Smart Cities Challenge Fund. Modeled after a “similar competition” in the United States, budget documents said the challenge prompts participants to “create ambitious plans to improve the quality of life for urban residents, through better city planning and implementation of clean, digitally connected technology including greener buildings, smart roads and energy systems, and advanced digital connections for homes and businesses.” According to a transcript of his remarks in the House of Commons Wednesday, Finance Minister Bill Morneau said “in the realm of digital technology, I know two things to be true. One: Canada can be a world leader in digital innovations. And two: we can’t afford not to be.” The Telecommunications and Broadcasting Acts will undergo a review with the aim of facilitating a “open and innovative Internet,” the government announced Wednesday as part of its 2017 financial plan. Budget documents said the government “proposes to review and modernize” the two pieces of legislation, with a goal of examining “issues such as telecommunications and content creation in the digital age, net neutrality and cultural diversity, and how to strengthen the future of Canadian media and Canadian content creation.” This review, of which further details “will be announced in the coming months,” is separate but related to Heritage Minister Mélanie Joly’s sweeping review of Canadian content in a digital age, the government said, and will build on the consultations already conducted. “For its part, the Government believes in an open and transparent Internet environment that emphasizes freedom — freedom to innovate, freedom to connect with others, and freedom of discussion,” budget documents said. Joly has said the results of the review and subsequent action plan will be forthcoming this year. The budget book reiterated statements Joly has made since the review began, including that the “new approach to growing Canada’s creative sector” would be global, as opposed to protectionist measures. A much-lobbied measure to change the tax system to increase the capital cost allowance rate businesses can claim for depreciable expenses on telecom equipment was not included in this year’s financial plan. What did make the cut was a plan to change the definition of taxi business under the Excise Tax Act so that ride-sharing businesses are subject to the same GST/HST rules as traditional taxis. “What we’re saying is there is a level playing field” whether you’re in an Uber or in a taxi, Morneau said Wednesday to reporters about the change. But the levelling of the playing field for foreign digital services, such as Netflix Inc., to make them subject to the same sales tax requirements as domestic competitors like BCE Inc.’s Crave TV — raised both during pre-budget consultations and as part of the Heritage Canada review — was not part of Wednesday’s budget announcement. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Affordable Internet carrot, legislation review in federal budget

Broadcast | March 22, 2017

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Affordable Internet carrot, legislation review in federal budget

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